Example for Withholding Taxes

Here's an example for withholding on transaction tax invoice.

A supplier based in Sao Paulo provides services to a company in Sao Paulo for 10000 BRL. Here's the invoice entered in Payables:

Payables Invoice Transaction Line

This table displays the transaction line in Payables:

Invoice Date	Invoice Number	Product Type	Amount	Bill To	Ship To
05/01/17	300	Service	10000.00	Sao Paulo	Sao Paulo
-	Total	-	10000.00 BRL	-	-

After entering the invoice, it is validated.

Tax Determination Processes

At invoice validation, the tax determination processes run for all the withholding taxes with a tax calculation point of Invoice. The tax determination processes run in a sequence.

This table displays the transaction tax computation.

< User-Defined ISS TransactionTax>	Transaction Tax Computation
Total invoice amount	10000 BRL
< User-defined ISS transaction tax >	(10000*10%) = 1000 BRL

This table displays the withholding tax computation.

< User-Defined ISS TransactionTax>	Withholding Tax Computation
<User-defined ISS transaction tax >	1000 BRL
< User-defined ISS transaction tax >	(1000*2%) = 20 BRL

Transaction Tax Line

After the tax determination process successfully completes, these tax lines are created:

Tax Line	Tax Regime	Tax Name	Tax Status	Tax Jurisdiction	Tax Rate	Tax Amount
1	<User-defined Brazil transaction tax regime	< User-defined ISS transaction tax >	Standard	Brazil	10.00%	1000.00 BRL

After the accounting successfully completes, Oracle ERP Cloud generates these accounting lines for the invoice:

Withholding Tax Line

After the tax determination process successfully completes, -20.00 BRL tax line is created:

Tax Line	Tax Regime	Tax Name	Tax Status	Tax Jurisdiction	Tax Rate	Tax Amount
1	<User-defined withholding tax regime>	< User-defined ISS withholding tax >	Standard	Brazil	2%	-20.00 BRL